527 committees

The "527" committees, also known as the "527" political groups or just the "527" groups, are products of a loophole carved in Section 527 of the Internal Revenue Code which covers political organizations. Under federal election law, members of Congress may raise only limited amounts of 'hard money' for their own campaign committees or 'leadership PACs' which aid other candidates. They may accept no contributions of more than $1,000 per election from an individual and $5,000 per election from a political action committee (PAC). But if they set up a politician 527, members of Congress can raise unlimited soft money from individuals, corporations and unions." [1]

Shortcomings of the 527 committee legal statutes

"Moreover, despite the July 2000 passage of a public disclosure law for all 527 groups, serious shortcomings exist in both the law and the disclosure system established by the Internal Revenue Service. As a result, it is difficult, sometimes impossible, to get the full story about which politicians have 527s, who contributes to 527s, and what the 527s spend their money on. Even if the politician 527s are banned by the pending McCain-Feingold (September 25, 1997)/Shays-Meehan legislation, this defective disclosure apparatus will hinder the tracking of new soft money flows to partisan nonpolitician 527s attempting to influence federal elections."[1]

Relevant Internal Revenue Code

"527 groups fall under a section of the Internal Revenue Code governing organizations that primarily attempt to influence election campaigns. Until recently, the section applied to political committees (such as candidate or party committees) that contributed to, or otherwise directly supported or opposed candidates. In the case of federal elections, such committees are subject to federal election law limits on amounts and sources of contributions. However the newer so-called '527s' do not (1) use 'magic' words that expressly advocate someone's election or defeat, and/or (2) directly subsidize federal campaigns themselves. Therefore, lawyers have successfully argued to the Federal Election Commission, they are exempt from the restrictions of federal campaign law and allowed to collect soft money which is unlimited donations from corporations, unions and wealthy individuals.

"There are basically two kinds of 527s active in federal politics: those that exist to promote certain politicians (which Public Citizen calls 'politician 527s') and those that exist to promote certain ideas, interests and partisan orientations in election campaigns. (Public Citizen calls these 'non-politician 527s')...

"Politician 527s generally serve as soft money arms of 'leadership PACs,' which incumbents use to aid other candidates and otherwise further their own careers. Like the campaign committees of members of Congress, leadership PACs can receive only 'hard money' contributions, which are limited in amounts and may not come directly from corporations or unions. Politician 527s use their soft money mainly to sponsor events that promote their own careers, help create a 'farm team' of successful state and local candidates, and spur partisan 'get-out-the-vote (GOTV)' efforts.

"Campaign committees and leadership PACs of members of Congress report to the Federal Election Commission (FEC), while 527 groups report to the Internal Revenue Service (IRS). Basic information about their contributions and expenditures are then posted on an IRS website."

Republican-inclined 527 committees

The following are some of the 527 committees which are considered Republican-inclined:

Alexander Bolton, "GOP leaders reverse field, build a new 527 network,"The Hill, May 19, 2004: "Ironically, one of the biggest obstacles party leaders face is their own effort for much of this election cycle to declare illegal the fundraising activity of 527s, tax-exempt groups named after the section of the tax code under which they are organized. ... GOP leaders accelerated their reversal immediately after the FEC voted 4-2 to reject a bipartisan plan restricting 527s by issuing what some Republicans viewed as a thinly veiled fundraising pitch for a slew of conservative soft-money groups. ... In a joint statement, Bush-Cheney campaign chairman Marc F. Racicot and RNC chairman Ed Gillespie declared that the FEC had given 'the 'green light' to all non-federal '527's' to forge full steam ahead in their efforts to affect the outcome of this year's Federal elections and, in particular, the presidential race.'"